Citigroup Beneish M Score

C
 Stock
  

USD 44.98  0.66  1.45%   

This module uses fundamental data of Citigroup to approximate the value of its Beneish M Score. Citigroup M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Continue to Citigroup Piotroski F Score and Citigroup Altman Z Score analysis.
  
Citigroup Long Term Debt is projected to decrease significantly based on the last few years of reporting. The past year's Long Term Debt was at 254.37 Billion. The current year Debt to Equity Ratio is expected to grow to 1.42, whereas Total Debt is forecasted to decline to about 443.7 B. Citigroup Calculated Tax Rate is projected to increase based on the last few years of reporting. The past year's Calculated Tax Rate was at 19.84. The current year Cash and Equivalents Turnover is expected to grow to 0.29, whereas Total Assets Per Share are forecasted to decline to 925.92.
At this time, it appears that Citigroup is an unlikely manipulator. The earnings manipulation may begin if Citigroup's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Citigroup executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Citigroup's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-3.07
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables0.74Focus
Asset QualityN/AFocus
Expense Coverage0.78Focus
Gross Margin Strengs1.02Focus
Accruals Factor0.78Focus
Depreciation ResistanceN/AFocus
Net Sales Growth1.2Focus
Financial Leverage Condition1.01Focus

Citigroup Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Citigroup's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Selling General and Administrative Expense44.9 B48.2 B
Significantly Down
Decreasing
Slightly volatile
Revenues95.9 B79.9 B
Fairly Up
Decreasing
Slightly volatile
Trade and Non Trade Receivables48.3 B54.3 B
Fairly Down
Increasing
Slightly volatile
Operating Income25.8 B27.5 B
Notably Down
Increasing
Slightly volatile
Net Cash Flow from Operations49 B61.2 B
Significantly Down
Decreasing
Stable
Total Liabilities1828.7 B2089.4 B
Fairly Down
Increasing
Slightly volatile
Investments1858.7 B1823.4 B
Fairly Up
Increasing
Slightly volatile
Gross Margin1.071.053
Fairly Up
Increasing
Slightly volatile
Depreciation Amortization and Accretion4.1 BB
Sufficiently Up
Increasing
Slightly volatile
Total Debt443.7 B473.6 B
Notably Down
Decreasing
Slightly volatile
Total Assets2018.7 B2291.4 B
Fairly Down
Increasing
Slightly volatile

Citigroup Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Citigroup's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Citigroup in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Citigroup's degree of accounting gimmicks and manipulations.

About Citigroup Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

EBITDA Margin

0.41

Citigroup EBITDA Margin is projected to increase slightly based on the last few years of reporting. The past year's EBITDA Margin was at 0.44

Citigroup Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Citigroup. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201720182019202020212022 (projected)
Trade and Non Trade Receivables38.38 B35.45 B39.86 B44.81 B54.34 B48.27 B
Revenues87.97 B97.12 B103.45 B88.84 B79.86 B95.87 B
Total Assets1,842.46 B1,917.38 B1,951.16 B2,260.09 B2,291.41 B2,018.68 B
Depreciation Amortization and Accretion3.66 B3.75 B3.9 B3.94 B3.96 B4.12 B
Selling General and Administrative Expense42.23 B41.84 B42.78 B44.37 B48.19 B44.85 B
Total Liabilities1,641.72 B1,721.16 B1,757.92 B2,060.65 B2,089.44 B1,828.74 B
Total Debt437.44 B442.11 B460.15 B500.73 B473.63 B443.69 B
Operating Income22.76 B23.45 B23.9 B13.63 B27.47 B25.75 B
Net Cash Flow from Operations(8.59 B)36.95 B(12.84 B)(20.62 B)61.25 B49 B
Investments1,492.24 B1,557.29 B1,582.72 B1,768.08 B1,823.37 B1,858.66 B

Citigroup ESG Sustainability

Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, Citigroup's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Citigroup's managers, analysts, and investors.
Environment Score
Governance Score
Social Score

About Citigroup Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Citigroup's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Citigroup using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Citigroup based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Citigroup Inc., a diversified financial services holding company, provides various financial products and services to consumers, corporations, governments, and institutions in North America, Latin America, Asia, Europe, the Middle East, and Africa. Citigroup Inc. was founded in 1812 and is headquartered in New York, New York. Citigroup operates under BanksDiversified classification in the United States and is traded on New York Stock Exchange. It employs 238000 people.

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Our tools can tell you how much better you can do entering a position in Citigroup without increasing your portfolio risk or giving up the expected return. As an individual investor, you need to find a reliable way to track all your investment portfolios. However, your requirements will often be based on how much of the process you decide to do yourself. In addition to allowing all investors analytical transparency into all their portfolios, our tools can evaluate risk-adjusted returns of your individual positions relative to your overall portfolio.

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Pair Trading with Citigroup

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Citigroup position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Citigroup will appreciate offsetting losses from the drop in the long position's value.

Moving together with Citigroup

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The ability to find closely correlated positions to Citigroup could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Citigroup when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Citigroup - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Citigroup to buy it.
The correlation of Citigroup is a statistical measure of how it moves in relation to other equities. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Citigroup moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Citigroup moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Citigroup can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching
Continue to Citigroup Piotroski F Score and Citigroup Altman Z Score analysis. Note that the Citigroup information on this page should be used as a complementary analysis to other Citigroup's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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When running Citigroup price analysis, check to measure Citigroup's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Citigroup is operating at the current time. Most of Citigroup's value examination focuses on studying past and present price action to predict the probability of Citigroup's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Citigroup's price. Additionally, you may evaluate how the addition of Citigroup to your portfolios can decrease your overall portfolio volatility.
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Is Citigroup's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Citigroup. If investors know Citigroup will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Citigroup listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
(0.24) 
Market Capitalization
91.5 B
Quarterly Revenue Growth YOY
(0.028) 
Return On Assets
0.0067
Return On Equity
0.0789
The market value of Citigroup is measured differently than its book value, which is the value of Citigroup that is recorded on the company's balance sheet. Investors also form their own opinion of Citigroup's value that differs from its market value or its book value, called intrinsic value, which is Citigroup's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Citigroup's market value can be influenced by many factors that don't directly affect Citigroup's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Citigroup's value and its price as these two are different measures arrived at by different means. Investors typically determine Citigroup value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Citigroup's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.